Vonovia SE

Investor Presentation • Sep 17, 2014

Deutsche Annington Immobilien SE

Capital Markets Day 2014

Bochum, 17th September 2014

The engine and the turbo…

German residential real estate

• Elements 1 & 2 ensure a decreasing cost basis and keep the organisation lean.
• Elements 3 & 4 create sustainable growth and power portfolio value generation. We are changing the product.
• Acquisitions do feed all elements, but are not necessary for growth generation.

We have a strategy that works without acquisitions, but acquisitions can be a turbo

Strong operational performance sets the basis...

Property management strategy

Good and getting better…

• Our property management is the backbone of our strong operational performance.
• This operational strength is reflected in the numbers:
• Net vacancy is effectively at 2.3%.
• In the major hotspots, our rental level and rent increase has outperformed our peers in 2014.
• This shows that our processes and the platform work very well.
• It further ensures integration is simple and fast – proved at DeWAG, to come at Vitus and Franconia.

Vacancy	DAIG
Total	3.8%
./. Privatisation	0.6%
./. Sales	0.6%
Rental Vacancy	2.6%
./. Ongoing Mod	0.1%
./.Vacant Flat Program	0.3%

	In-place rent
	DAIG	DW	GAG	LEG
Berlin	5,84	5,59	5,21
Rhein-Main	7,30	7,05
Frankfurt am Main	7,26		7,72
Wiesbaden	7,49
Rheinland	6,62	6,59	6,31
Düsseldorf	7,14		7,14	6,03
Köln	6,70		6,77
Bonn	6,21		6,10
Leverkusen			5,60
München	6,59		6,26
Dortmund	4,88		4,84	4,69
Duisburg	5,03		4,73	4,86
Essen	5,25		5,42

In-place rent development 2014*
	2014Jahresanfang DAIG	DW	GAG	LEG
Berlin	1,4%	1,1%	1,4%
Rhein-Main	1,7%	1,9%
Frankfurt am Main	1,7%		0,8%
Wiesbaden	1,6%
Rheinland	3,6%	2,8%	1,4%
Düsseldorf	3,0%		2,1%	2,2%
Köln	4,4%		1,2%
Bonn	2,5%		2,2%
Leverkusen			1,1%
München	4,1%		0,5%
Dortmund	1,9%		0,6%	2,2%
Duisburg	1,2%		1,7%	2,1%
Essen	0,6%		1,1%

* Rents as of June 30th, 2014 compared with rents as of Dec 31th, 2013, not l-f-l.

…backed by property management with best-in-class processes and an easily scalable platform….

Property management strategy

Our operational business model ensures decreasing average cost per unit through standardization and scalability

…which drives further optimizing of our processes and easy integration.

Property management strategy

The use of iPad-Technology in property management reduces the time effort of administrative tasks …

Property management strategy

Tobias Reher a	Sicht - und Funktionskontrolle	Dienstleisterkontrolle
Hallo, Tobias	1212.4 Verkehrssicherungssschnitt
Eingang	G
Schreibtisch	Ausführung bis	00.00.0000
in Bearbeitung	$\bullet$ letzte Ausführung	19.07.2013
Vorlagen	Mangel	$\circ$
Standardformulare	$\circ$
Mieterwechsel	1101.1 Rasen mähen CD
Bau und Instandhaltung	Ausführung bis $\overline{a}$	00.00.0000
Ablage	letzte Ausführung	04.04.2014
Mietobjekte	Mangel
Gesendet	erbracht	0%
Papierkorb	Beschreibung	Rasenschnitt nicht durchgeführt
Extras Funktionen	Foto G 3	$\Theta$
C Aktualisiert 07.07.14 13:31

Tobias Reher Ð		Eingang
Hallo, Tobias Eingang Schreibtisch	G	Heute 09:44 • Techn. Anfragen Wohnung Schimmel 07.07.2014 Eisenstr. 19, 44799 Bochum
in Bearbeitung Vorlagen	O	Heute 09:18 · Sicht- und Funktionskontrolle (SLA) 07.07.2014-12.07.2014 Schlägelstr. 25, 44799 Bochum
Standardformulare	$\left( 2\right)$	Heute 08:51 · Sicht- und Funktionskontrolle (SLA) 07.07.2014-12.07.2014
Mieterwechsel Bau und Instandhaltung	$\blacksquare$ $\bullet$	Kampstr. 4, 44799 Bochum Heute 08:06
Ablage Mietobjekte		. Techn. Anfragen Wohnung Schimmel 07.07.2014 Kampstr. 4, 44799 Bochum
Gesendet		04.07.2014 14:54 · Sicht- und Funktionskontrolle (SLA) 30.06.2014-05.07.2014 Kampstr, 4, 44799 Bochum
Papierkorb Extras
Funktionen	$\left(5\right)$
Ć Aktualisiert 07.07.14 13:33		Sortieren Karte Anzeigen

…allowing us to optimize field service productivity and reduce costs

Property management strategy

Current situation Future

• heavy IT equipment (notebook, camera, DigitalPen with printed form, securitytoken, … )
• plenty of complex IT processes necessary (e.g. photo export, etc.)
• no off-line solution, sometimes poor mobile broadband support
• cost-intensive IT equipment and licenses necessary

• replacement investment of IT equipment necessary

• only one device (iPad mini cellular) instead of a current minimum of four

• intuitive app for all business processes with high user friendliness
• 100% off-line processing possible
• integrated photo function to speed-up processes
• Significant cost reduction

Modernisation of our portfolio is a highly industrialised & standardised process delivering steady attractive returns

Portfolio management strategy

• Through efficiency gains more potential in existing portfolio visible. Cost of modernisation is decreasing, i.e. modernisation of units with a lower rental growth potential and earning ~7% unlevered yield is possible
• Activities capped by availability of craftsmen and construction engineers only

We implemented an efficient process to acquire smaller portfolios fast and smoothly (tactical acquisitions)

Portfolio management strategy

• With tactical acquisitions (≤ 500 units), we enlarge our transaction toolkit

• Our target is to refill reductions from privatisation sales by tactical acquisitions

• Standardised and lean "fast track" process (2-4 weeks) for tactical acquisitions implemented

• Low complexity leads to acceptable administrative cost
• Best use of regional market knowledge
• Requirements for strategic fit:
• Asset deal
• Focus region in line with growth-return matrix
• Significant Dt. Annington portfolio close by

• Property strategy (rental only)

• Lean and tailored process to drive tactical acquisitions

• First acquisitions as testing balloon in 2014, steady deal flow from 2015 onwards

The target of our Extension Strategy is to enlarge our traditional business and increases customer satisfaction

Extension strategy

Key Objectives

• Example Increase in customer satisfaction resulting in higher customer loyalty
• Additional contribution and growth from extensions of the value chain
• Improvement of efficiency, costs and quality of DA core business process chain

Strategic advantages of the TGS joint venture:

• Higher quality (build-up of know how, efficient & closely coordinated processes)
• High reliability (direct access to craftsmen capacities)
• Cost reduction (managing total costs of process)
• Nationwide scalable operating platform

TGS serves the basis of our investments and offers a significant cost advantage

Our innovative bathroom concept evidences our standardised & innovative processes

Extension strategy

We will focus on the systematical development of new services and products along social megatrends

Extension strategy

New services will enlarge our product range and respond to todays social megatrends

© Deutsche Annington Immobilien SE

12

We see plenty of opportunities for acquisition and have the power to bring them home

Acquisition strategy

However every potential acquisition is monitored by a dedicated process, keeping us strongly disciplined

Return matrix is a powerful model to make an early decision about the strategic fit of an offered portfolio

The "cage" keeps us highly disciplined and prevents us from overpaying - a high risk in current markets

Acquisition strategy

We do not need any acquisitions to grow, but if it comes to acquisitions...

Acquisition strategy

...we are a highly appreciated and reliable partner

2 Best-in-class financing strategy with fast access to a comprehensive set of funding tools.

3 Our German-wide presence is a competitive advantage ("You don't easily find portfolios of 5,000 units in one city")

4 We have a dedicated and well experienced internal M&A team

Our deal criteria are transparent

6

5

The Franconia portfolio transaction proves our competitive advantage to do acquisitions

Acquisition strategy

We are the engineers in the German Residential market. Our organisation is running well and continuously getting better.

We have an eye on our cost structure.

We are able to create value without acquisitions.

If an acquisition supports our strategy, we are ready to act - quickly and on all levels.

Additional slides for Round Table Meetings (Financing Strategy & Extension Strategy)

(Pages 19-24)

Our key success factors for efficient financings

Financing strategy

USP Success factor

• All financial strategic decision have been delivered over recent years, from restructuring to bond issuance debut
• All refinancings at least six month prior to maturity closed
• Top three in European bond issuer within twelve months with performing instruments
• First in real estate sector
• Risk Controlling
• Clear responsibilities and processes
• Scalable platform (process & IT)
• Capability of standardised loan integration
• Various awards, including best debut bond issuer (Global Capital), real estate financing deal of the year (The Banker)
• Various nominations, including European (ACT) and Germany's treasury team of the year (Der Treasurer)

Highly experience team with different background (Rating Agency, Corporates, Investment Bank, Hedge Fund)

Execution of best-in-class financial

Benchmark Front-, Middle und Backoffice

Best-in-class Treasury Management System (SAP)

strategy

Financing strategy

Our key success factors for efficient financings

Lower LTV into target zone 3 Establish unsecured financing instruments 2 Obtain Investment Grade rating 4 Extend and balance maturities Tackle maturities between 6 and 15 months ahead of time Increase unencumbered assets 6 5 Acquisition strategy strictly adhering to credit framework Keep disciplined approach throughout the whole process, by actively managing the balance sheet 8 7 DAIG executed a clear financial strategy. 1

Our key success factors for efficient financings

Financing strategy

Front Office		Middle Office	Back Office
Cash and Liquidity Management	Finance/Capital Markets and Funding	Risk Controlling	Administration
• Cash Management • Account clearing • Payments • Handling of cheques • Liquidity forecast • Actual data generation • Bank fees control • Bank reporting	• Leader of deal-teams • Negotiations • Structuring deals • All external contacts • Initiation of refinancing process • Coordination of information flows • Negotiation and structuring of internal information • Creation of presentations for teasers, negotiations and committees etc. • Creditor relations	• Calculation of market values • Transaction evaluation • Hedge effectiveness tests • Risk management • Covenant reporting • IPDs	• Administration of loans • Administration of guarantees • Release process for sales • Support for refinancing process (land register, notaries etc.) • Administration of securities

Financing strategy

Best in class financing strategy with comprehensive toolkit as a basis for operational excellence and qualifies us for several acquisition even in parallel, if they arise.

Long-term and well-balanced maturity profile

Major KPIs as of June 30 , 2014
LTV (nominal)	51.2%	c. 50%
Unencumbered assets in %	50%	≥ 50%
Global ICR	2.6x	Ongoing optimisation
Financing cost	3.3%	with most economical funding

Significant efficiency gains by thorough product standards from apartment modernization to new construction

Extension strategy

Buildings

New

construction

Product standardization is a cornerstone of the industrialization of DA's construction processes

Example: progressive standardization of bathrooms

• 1. Implementation of private brand for ceramics and armatures
• 1. Concept for DAIG standard bathroom types
• 1. Development and implementation of a fixed price complete bathroom solution for sitting tenants

Next steps: White label products for central heating systems and construction chemistry products

Example: Development of a supply chain optimization through standardization of windows

• Preproduction of standardized windows in eastern Europe
• Central delivery
• Installation by own craftsmen organization

Further potentials: doors and balconies

Example: Standardized attic conversions in Darmstadt

• Prefabricated modules allow for a on-site installation time reduction of up to 50%
• Significant cost reduction and thus enlargement of attic conversion potential
• Further potentials: doors, balconies and new construction

Alignment of product standards with:

• Local demand
• Demographic trends
• Internal letting processes

Exploitation of purchasing power by central procurement

Installation by own craftsmen organization TGS

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This presentation includes statements, estimates, opinions and projections with respect to anticipated future performance of DA ("forward-looking statements") which reflect various assumptions concerning anticipated results taken from DA's current business plan or from public sources which have not been independently verified or assessed by DA and which may or may not prove to be correct. Any forward-looking statements reflect current expectations based on the current business plan and various other assumptions and involve significant risks and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Any forward-looking statements only speak as at the date the presentation is provided to the recipient. It is up to the recipient of this presentation to make its own assessment of the validity of any forward-looking statements and assumptions and no liability is accepted by DA in respect of the achievement of such forward-looking statements and assumptions.

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IR Contact & Financial Calendar

Contact	Financial Calendar	H2 2014
Investor Relations	August 4-5	Management Roadshow, London
Deutsche Annington Immobilien SE	August 6	Management Roadshow, Brussels
Philippstraße 3	August 7	Management Roadshow, Amsterdam
44803 Bochum, Germany	Sep 9	Management Roadshow, Boston
Tel.: +49 234 314 1609	Sep 10-11	BAML Conference, New York
investorrelations@deutsche-annington.com	Sept 17	DAIG Capital Markets Day
http://www.deutsche-annington.com	Sep 22	Berenberg/GS Conference, Munich
	Sep 23	Baader Bank Conference, Munich
	Sep 25	EPRA Conference, London
	Oct 1	SocGen Conference, London
	Oct 30	DAIG Interim Report Jan.-Sept. 2014
	Oct 31	Management Roadshow, location tbc
	Nov 4-5	Management Roadshow, London
	Nov 12	Management Roadshow, location tbc
	Dec 1	Berenberg Conference, Penny Hill (UK)